An automobile manufacturer unexpectedly announces that it has hired a new chief executive officer.It is widely believed that the presence of this individual will raise the profitability of the corporation.At the same time interest rates unexpectedly rise.Which of the above would tend to make the price of the stock rise?
A)the announcement and the rise in interest rates
B)the announcement but not the rise in interest rates
C)the rise in interest rates,but not the announcement
D)neither the announcement nor the rise in interest rates

Question

Quizplus · Accepted Answer

The announcement of a new CEO who is expected to increase the profitability of the corporation is seen as positive news for the company and would likely result in an increase in the stock price. The rise in interest rates, on the other hand, is seen as negative news and could potentially result in a decrease in the stock price. However, since the question asks for the factor that would tend to make the stock price rise, the best answer would be B, which only includes the positive news of the CEO announcement.

An Automobile Manufacturer Unexpectedly Announces That It Has Hired a New